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Forest Degradation and Economic Growth in Nepal, 2003–2010

Jean-Marie Baland (), François Libois and Dilip Mookherjee
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Dilip Mookherjee: BU - Boston University [Boston], BREAD

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Abstract: We investigate the relation between economic growth, household firewood collection and forest conditions in Nepal between 2003 and 2010. Co-movements in these are examined at the household and village levels, combining satellite imagery and household (Nepal Living Standard Measurement Survey) data. Projections of the impact of economic growth based on Engel curves turn out to be highly inaccurate: forest conditions remained stable despite considerable growth in household consumption and income. Firewood collections at the village level remained stable, as effects of demographic growth were offset by substantial reductions in per-household collections. Households substituted firewood by alternative energy sources, particularly when livestock and farm based occupations declined in importance. Engel curve specifications which include household productive assets (a proxy for occupational patterns) provide more accurate predictions. Hence structural changes accompanying economic growth play an important role in offsetting adverse environmental consequences of growth.

Keywords: Deforestation; Growth; Environmental Kuznets Curve; Nepal (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-big, nep-dev and nep-env
Date: 2018-04
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Published in Journal of the Association of Environmental and Resource Economists, 2018, 5 (2), pp.401 - 439. 〈10.1086/695690〉

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DOI: 10.1086/695690

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